Lachenmeier, Enloe & Rall - January, 2003 Publication

Uninsured or Intoxicated Drivers Not Entitled to Noneconomic Damages—At Least So Far
January, 2003

Since October 23, 1999, drivers in the State of Oregon who are involved in motor vehicle accidents while either driving uninsured or under the influence of intoxicants have been precluded by statute from recovering noneconomic damages from a driver who negligently caused the accident, with only few exceptions. This is pursuant to ORS 18.592, passed by the Oregon Legislature in 1999. It is only with relatively recently filed litigation that we are starting to see legal challenges to the statute. This area has become a hotbed of legal activity, by way of motions challenging the constitutionality of the statute, advanced by attorneys for uninsured or intoxicated plaintiff drivers. The Court of Appeals currently has the issue of the constitutionality of the statute before it, but has not yet issued a ruling. Oral argument is expected to take place within the next few months, which means the court’s ruling is still a considerable distance down the road.

Some attorneys representing either uninsured or intoxicated drivers contend that the statute is an unconstitutional exercise in legislative power, and they have found some (but not consistent) support for their position with a few judges and arbitrators. What these attorneys may not tell you when presenting such claims is that there is no Oregon case law holding the statute to be unconstitutional and that, unless and until such case law comes into existence, claims for noneconomic damages precluded by statute need not be entertained. While there may be some claims in which the risk of the statute being declared unconstitutional down the road may outweigh the decision to stand firm on existing law, because of especially dangerous claim potential in particularly bad injury cases for example, asserting an insured’s statutory right to not have to compensate an uninsured or intoxicated driver for noneconomic damages is a perfectly valid position to take. Although there is currently a challenge to the constitutionality of the statute at the Court of Appeals level, only time will tell whether our appellate judges will decide that the legislature was acting beyond its authority in 1999 when it decided to pass legislation attempting to deal with the very significant problem of drivers operating on Oregon roads without liability insurance or while intoxicated.

A couple of Multnomah County judges have held that the statute is an unconstitutional restriction on an injured person’s right to a jury trial or on the right to an injured person’s remedy for a wrong caused by a negligent driver. While it is true that there have been these trial court level rulings finding the statute to be unconstitutional, at least one local pro tem judge, and a local arbitrator, have held that the statute is constitutional and enforceable. The judge’s reasoning was that driving insured and sober are legislatively imposed conditions to bringing a claim for noneconomic damages, much as payment of a court filing fee or participating in mandatory arbitration are conditions precedent to proceeding to a jury trial. Just as these conditions are not considered to be an unconstitutional denial of the right to a jury trial, neither is the condition of driving insured and sober. Also, the judge reasoned that uninsured or intoxicated drivers are still entitled to assert claims for their economic damages (medical expenses, lost income, etc.) and thus such plaintiffs are not denied a remedy for injuries sustained in the accident. Such plaintiffs are merely denied one element of their claim, and that is totally within their own control, by not driving uninsured or intoxicated.

It is important to keep in mind that there are exceptions to this statute, which do make it inapplicable in certain situations. Those are: (1) where the defendant was also driving uninsured or under the influence of intoxicants; (2) where the injury resulted from the defendant’s “intentional” tort; (3) where the defendant was driving “recklessly” (which is more than mere “negligence”); (4) where the defendant was engaged in a felony at the time of the accident; and (5) where the plaintiff had been insured within 180 days before the date of the accident but that coverage has lapsed, and the driver had not driven while uninsured for a period of one year before the date coverage lapsed.

This writer is sure that none of the readers of this article have insureds who fall into any of the first four exceptions specific to defendants described above! The fifth listed exception, the only one relating to plaintiffs, appears to have been the result of a compromise. It provides that an uninsured driver who has only become uninsured within 180 days of the accident, and who had not driven while uninsured for a one-year period before his or her coverage lapsed, is not subject to the rule which otherwise precludes a claim for noneconomic damages. Think of this as the “newly uninsured” exception, for ease of reference. This may have been designed to exclude drivers from the effect of this arguably harsh rule when they did not know coverage had lapsed (for example, due to a spouse or former spouse in a divorce situation failing to pay a premium, without the driver knowing it). In creating the exception, however, the statute also excludes even drivers who knew coverage had lapsed but continued driving uninsured anyway. There seems to be no particular policy reason for this exclusion to be as broad as it is, which is what suggests it resulted from compromise in the legislative decision making process.

As a result of this statute, careful attention should be paid to whether a claimant driver was uninsured at the time of the accident or was driving while under the influence of intoxicants. If either were true, a claim for noneconomic damages may not need to be entertained. Rather, assuming the defendant was “only” negligent, the only damages which would usually need to be considered would be the plaintiff’s economic damages. If the plaintiff driver does not appear to be entitled to present a claim for noneconomic damages, the question of exceptions to the rule precluding noneconomic damages will need to be carefully examined, as discussed above.

Please feel free to call upon the writer, Jay Enloe, at any time, if you have any questions about this subject or would like to discuss how it might apply in a particular case. He may be reached by phone at (503) 768-9600 or by email at jay@lerlaw.com.